The initial public offering of state-run defence equipment maker Bharat Dynamics Ltd almost touched the one-third subscription mark on the first day of bidding on Tuesday, led by institutional demand.

The issue of 22.45 million shares received bids for nearly 7.25 million shares on day one, stock-exchange data show.

Institutional buyers bid for 5.52 million shares, or half the portion reserved for them. High net-worth individuals and corporate bodies bid for only 1.5% of their quota, the data showed.

The portion set aside for retail investors, who cannot individually bid for shares exceeding Rs 2 lakh in value, was covered 21%.

The IPO, which does not have anchor investors, will close on Thursday.

The offering is entirely a share sale by the government, which will raise up to Rs 960.94 crore ($148 million) at the upper end of the Rs 413-428 price band. The Hyderabad-based company is not issuing any fresh shares.

Bharat Dynamics is seeking a valuation of Rs 7,844 crore ($1.2 billion) at the upper end of the price band.

The government’s stake will fall to 87.75% after the IPO from 100%. It will get three years from the date of listing to bring its stake down to 75% or below to meet regulatory norms on minimum public holding.

The stake sale in Bharat Dynamics is part of the government’s Rs 72,500 crore disinvestment target set for the current financial year. The government has already exceeded the target, having raised Rs 92,476 crore. More than a third of that amount, Rs 36,9015 crore, came from a sale of stake in state-run refiner Hindustan Petroleum Corp Ltd to state-run explorer Oil and Natural Gas Corp.

The government has set a divestment target of Rs 80,000 crore for 2018-19, as it looks to boost rural and infrastructure spending as well as contain the fiscal deficit ahead of general elections by next year.

Bharat Dynamics was incorporated in 1970. The company is the sole supplier of surface-to-air missiles and anti-tank guided missiles to the Indian armed forces. It also makes underwater weapons, launchers, torpedoes and other equipment. It had an order book of Rs 11,164 crore as on 31 October 2017.

The company runs three factories in Hyderabad, Bhanur (both in Telangana) and Visakhapatnam (Andhra Pradesh). It is setting up two more factories at Ibrahimpatnam (near Hyderabad) and Amravati in Maharashtra to make missiles.